let's listen now: >> there's still a dark cloud over this city. you've heard the numbers. unfortunately, the numbers are going to get higher. we'll know that as the day progresses. i have to thank the men and women who have been trained for this and unfortunately had to execute their training, all the first responders. it was extraordinary yesterday afternoon, just extraordinary. on behalf of the entire city council, i want to tell you that you've heard the numbers, but what we have to deal with in the very near future is the stress, the anxiety, the uncertainness, in the minds of all the people that are directly affected. those that have lost their homes, completely lost their homes, and those that will be out of their homes and residences for many months to come. i tell you now, we're prepared to do that, to deal with it all, we're working on it. as of yesterday afternoon. and we'll continue.

thank you very much. i'd like to introduce to you our city manager, connie jackson. >> thank you for being here today. jenna: we'll continue to monitor that news conference in san bruno, obviously a disastrous fire and still burning. we'll continue to watch this and bring you the headlines. it's one of our biggest stories of the day but not our only story. jon: it's an awful situation there but on the other coast, the east coast in washington, d.c., president obama is preparing to give his first formal news conference in months. what is theo whaoe is the president hope to go achieve? we expect to hear a great deal about the economy and his proposal for a new $50,000,000,000.2 stimulus. let's listen now to president obama. we'll have full reaction and a number of great guests afterwards to respond. >> good morning. before i take your questions, i just want to

talk a little bit about our continuing efforts to dig ourselves out of this recession and to grow our economy. as i said in cleveland on wednesday, when i ran for -- i ran for president because i believed the polices in the previous decade had left our economy weaker, and our middle class struggling. there were polices that cut taxes, especially for millionaires and billionaires, and cut regulations for corporations and for special interests. and left everyone else pretty much fending for themselves. there were polices that ultimately culminated in a financial crisis and a terrible recession that we're still digging out of today. we came into office with a different view about how our economy should work. instead of tax cuts for millionaires, we believed in cutting taxes for middle class families and small business owners. we've done that. instead of letting corporations play by their

own rules, we believe in making sure that businesses treat consumers well and friendly and play by the same rules as everyone else, so we put in place common sense rules that accomplish that. instead of tax breaks that encourage corporations to create jobs overseas, we believe in tax breaks for companies that create jobs right here in the united states of america. and so we've begun to do that. we believe in investments that will make america more competitive than the global economy. investments in education and clean energy and research and technology, and we're making those investments. these are the principles that have guided us over the last 19 months, and these are the principles that form the basis of the additional economic proposals that i offered this week. because even though the economy is growing again and we've added more than

750,000 private sector jobs this year, the whole -- the hole the recession left was huge and progress has been painfully slow. millions of americans are still looking for work. millions of families are struggling to pay their bills or the mortgage. and so these proposals are meant to both accelerate job growth in the short term and strengthen the economy in the long run. these proposals include a more generous permanent extension of the tax credit that goes to companies for all the research and innovation that they do here in america. and i've proposed that all american businesses should be allowed to write off all the investments they do in 2011. this will help small businesses upgrade their plants and equipment and will encourage large corporations to get off the sidelines and start putting their profits to work in our economy. we also announced a six-year plan to rebuild america's

roads and railways and run ways. already, our investments in infrastructure are putting folks in the construction industry back to work. this plan would put thousands more back to work and would help us remain competitive with countries in europe and asia that have already invested heavily in projects like high-speed rail ways. but one thing we can do next week is end a month-long standoff on a small business jobs bill that's been held up in the senate by a partisan minority. i realize there are plenty of issues in washington where people of good faith simply disagree on principle this should not and is not one of those issues. this is a bill that does two main things. it gives small business owners tax cuts and it helps them get loans. it will eliminate capital gains taxes for key investments, in 1 million small businesses.

it will provide incentives to invest and create jobs for 4 million small businesses. it will more than double the amount some small business owners can borrow to grow their companies. it's a bill that's paid for. a bill that won't add to the decifit, it has been written byand republicans. it's a bill that's been praised by the chamber of commerce. and yet, a minority of republican senators have been using legislative tactics to prevent the bill from even getting to a vote. now, i was pleased to see that yesterday republican senator george voinovich of ohio said he would refuse to support this blockade any longer, senator voinovich said this country is really hurting and we don't have time anymore to play games. i could not agree more. i understand there's an election coming up. but the american people didn't send us here to think about our jobs. they sent us here to think

about theirs. there are small businesses right now who are putting off plans to hire more workers because this bill is stalled. that's not the kind of leadership this country deserves. and i hope we can now move forward to get small business owners the relief they need to start hiring and growing again. while on the subject of economics, i also want to make an announcement about my economic team. this week, cristina romer returned to berkeley after a tireless, outstanding tenure as chair of the council of economic advisers. kr*euts een is brilliant, she is dedicated, and she was part of the team that helped save this country from a depression. so we're going to miss her dearly. but today, i'm happy to announce austan goolsbee as her replacement. austan has been one of my good friends and close economic advisers for many years. he's one of the finest economists in the country, and he has worked as a

member of the council of economic advisers since we arrived here in washington. he's not just a brilliant economist, he's someone who has a deep appreciation of how the economy affects every day people and he talks about it in a way that is easily understood. he already knows and works with the rest of the team very well. i have complete confidence he's going to do an outstanding job as chair. finally, tomorrow, we will commemorate not only the heart break of september september 11th, but also, the enduring values and resilient spirit of america. both michelle and i will be joining our fellow citizens in remembering those who were lost on that day, and honoring all who exhibited such extraordinary heroism in the midst of tragedy. i'll have further remarks tomorrow, but for now, let me just note that tomorrow is a national day of service and remembrance. and i hope each of us finds a way to serve our fellow

citizens. not only to reaffirm our deepest values as americans, but to rekindle that spirit of unity and common purpose that we felt in the days that followed that september morning. and now, i'd be happy to take some questions and i'm going to start with darlene supperville. thank you mr. president, you said this week that comes democrats wouldn't do well in the november election if it turns out to be a referendum on the economy but with millions of people out of work and millions of people losing their homes, how could it not be a referendum on the economy, and your handling of it, and why would you not welcome that? >> well, what i said was that if it was just a referendum on whether we've made the kind of progress that we need to, then people around the country would say

we're not there yet. if the election is about the polices that are going to move us forward versus the polices that will get us back into a mess, then i think the democrats will do very well. and here's why. as i just indicated, middle class families had been struggling for a decade, before i came into office. their wages and incomes had flat lined, they were seeing the cost of everything from health care to sending their kids to college going up, job growth was the weakest of any economic expansion between 2001 and 2008 since world war ii, the pace was slower than it's been over the last year. so these polices of cutting taxes for the wealthiest americans, of stripping away regulations that protect consumers, running up a

record surplus to a record decifit, those polices finally culminated in the worst financial crisis we've had since the great depression. and for 19 months, what we have done is steadily worked to avoid a depression, to take an economy that was contracting rapidly and making it grow again, a situation where we were losing 750,000 jobs a month and now we've had eight consecutive months of private sector job growth. and made an investments that are going to strengthen the economy over the long term. but we're not there yet. i mean, we lost 4 million jobs in the six months before i was sworn in. and we lost 8 million jobs total during the course of this recession. that is a huge hole to dig ourselves out of, and people who have lost their jobs

around the country and can't find one, moms who are sending out resumes and not getting calls back, worried about losing homes, not being able to pay bills, you know, they're not feeling good right now. and i understand that. and i ran precisely because i did not think middle class families in this country were getting a fair shake and i ran because i felt that we had to have a different economic philosophy in order to grow. that middle class can grow our economy over the long term. now, for all the progress we've made, we're not there yet, and that means the people are frustrated and that means people are angry. and since i'm the president, and democrats have control of the house and senate, it's understandable that people are saying, you know, what have you done. but between now and november, when i'm going to

re -- what i'm going to remind the american people of is the polices that we have put in place that moved us in the right direction, and the polices that the republicans are offering right now are the exact policy that is got us into this mess. it's not a situation where they went and reflected and said to themselves, you know what, we didn't do some things right, and so we've got a whole bunch of new ideas out here that we want to present to you that we think are going to help put us on the path of strong growth. that's not what happens. the chairman of their committee has said we would do the exact same thing as we did before obama took place. well -- took office. well, we know where that led and a perfect example is the debate we're having on taxes right now. i have said that middle class families need tax relief right now, and i'm prepared to work on a bill

and sign a bill this month that would ensure that middle class families get tax relief. 97 percent of americans make less than $250,000 a year. $250,000 a year or less. and i'm saying we can give those families, # 7 percent, permanent tax relief. and by the way tporbgs those who make more than $250,000, they'd still get tax relief on the first $250,000, they just wouldn't get it for income above that. now, that seems lake a common sense thing to do. and what i've got is the republicans holding middle class tax relief hostage because they're insisting we've got to give tax relief to millionaires and billionaires to the tune of about $100,000 per millionaire. which would cost over the course of ten years

$700 billion. and the economists say it is probably the worst way to stimulate the economy. that doesn't make sense, and that's an example of what this election is all about. if you want the same kinds of skewed polices that ledtous this crisis, then the republicans are ready to offer that. but if you want polices that are moving us out, even though you may be frustrated, even though change isn't happening as fast as you'd like, then i think democrats are going to do fine in november. okay. karen. >> thank you mr. president. you're looking for republican help on the economic proposals you unveiled this week and you also mentioned the small business bill but you're not odds with them over tax cuts. is there room for a middle ground whereby, for example,

the tax cuts on the wealthy could be extended for a period of time and then allowed to expire? >> well, certainly there's going to be room for discussion. my hope is that on this small business bill that is before the senate right now, that we actually make some progress. i still don't understand why we didn't pass that two months ago. as i said, this was written by democrats and republicans this is a bill that traditionally, you probably get 90 percent or 100 percent republican support. but we've been playing politics for the last several months, and if the republican leadership is prepared to get serious about doing something for families that are hurting out there, i would love to talk to them. now, on the high income tax cuts, my position is let's get done what we all agree on. what they've said is they

agree that the middle class tax cuts should be made permanent. let's work on that, let's do it. we can have a further conversation about how they want to spend an additional # hundred billion dollars to give an average of $100,000 to millionaires. they think is a bad idea. tpurp going to spend that money, there are a lot better ways of spending it, but more to the point, these are the same folks who say they're concerned about the deficits. why would we borrow money on polices that won't help the economy and help people who don't need help? but set thank aside, we've got an area of agreement which is let's help families out there who are having a tough time. as i said, we could this month give every american

certainty and tax relief, up to $250,000 a year. every single american would benefit from that. now, people who make $250,000 a year or less, they'd benefit on all their income. people who make a million dollars would benefit on a quarter of their income. but the point is that that's something that we can all agree to. why hold it up? why hold the middle class hostage in order to do something that most economists don't think makes sense? what i'm saying is let's do what we agreed to and that the american people overwhelmingly agree to, which is let's give certainty to families out there that are having a tough time. chip reed.

>> thank you mr. president. on the economic package that you rolled out earlier this week, first on the business tax cuts, why did you wait until this superheated campaign season to roll it out? a lot of your critics and even some democrats say well, clearly, he's just using this for political purposes, he doesn't have any expectation it's actually going to be passed. it's a political weapon. why did you wait so long to bring that out. on the stimulus part, we can't get people in the white house to say it is a stimulus. $50 billion for roads and other infrastructure but they avoid the word stimulus like the plague. is that because the original stimulus is so deeply unpopular, and if so, why is it so unpopular? >> let me go back to when i first came into office, we had an immediate tax which was to rescue an economy that was tipping over a

cliff. and we put in place an economic plan that 95 percent of economists say substantially helped us avoid the depression -- a depression. a third of those were tax cuts, by the way. a third of that economic plan was tax cuts for individuals and for small businesses. so we have this notion -- this notion that we waited until now to put forward a series of plans, chip, we just on the small business issue alone, we have cut taxes for small businesses eight times during the course of the last 18 months so we're hardly johnny come lately on this issue. now, when you put all the things we've done together, it has made a difference. three million people have jobs that wouldn't have them otherwise had we not taken these steps. the economy would be in much worse shape. but as i said before, we're not where we need to go yet,

which means that if we're not there yet, what else can we do. and the proposals that we put forward are ones that historically, again, have garnered bipartisan support. a research and development tax credit so that companies that are investing in research here in the united states, which is part of what's going to keep us growing and keep us innovative, let's make sure that companies are strongly incentivized to do that. making sure that they're expensing accelerated business depreciation. it's happening in 2011. so that if companies are sitting on the sidelines right now, not sure whether they should invest, let's give themgen centive to invest now to give that a jump start. on infrastructure, we've got a highway bill that traditionally is done every six years and what we're saying is let's ramp up what we're doing, let's beef it

up a little bit because we've got this infrastructure all across the country that everybody from governors to mayors, to economist, to engineers of all political stripes have said it's holding us back in terms of our long term competitiveness. let's get started now, rebuilding america. and in terms of paying for some of these things, let's stop giving tax breaks to companies that are stipulating jobs overseas, let's stop incentivizeing that, let's give tax breaks to companies that are investing here in the united states of america. those are all common sense approaches, historically, as you know, you've been around this town for a long time, usually republicans and democrats agree on infrastructure, usually republicans and democrats agree on making sure that research and development investments are made right here in the united states, and so let's get it done. it has nothing to do with the notion that somehow what

we did previously didn't work. it worked. it just hasn't done as much as we need it to do. we've still got a long ways to go. and we're going to keep on doing it. >> so this is a second stimulus? >> [laughter] >> you know, here's how i would -- there is no doubt that everything we've been trying to do, everything we've been trying to do, is designed to stimulate growth and additional jobs in the economy. i mean, that's our entire agenda. so i have no problem with people saying the president is trying to stimulate growth and hiring. isn't that what i should be doing? i would assume that's what the republicans think we should do. to stimulate growth in jobs. and i will keep on trying to stimulate growth and jobs for as long as i'm president of the united states.

>> it's now been more than two months since the regulatory reform bill has passed, the centerpiece of that is consumer protection bureau and yet you haven't named a head. is elizabeth warren still a leading candidate and if not are you worried about some sort of senate hurdle for her confirmation? thank you. >> this is great opportunity to talk to the american people about what i do think is going to be hugely helpful to middle class families in the years and decades to come, and that is an agency that has been set up, an independent agency, whose sole job is to protect families in their financial transactions, so if you are getting a credit card, we are going to have an agency that makes sure that that

credit card company can't jack up your rates without any reason, including on old balances, and that could save american consumers tens of billions of dollars just in the first couple of years if you are out there looking for a mortgage and we all know that part of the problem with the financial crisis was that folks were peddling mortgages that were unstable, that had these huge balloon payments, that people didn't fully understand well. now, there's going to be some oversight in terms of how mortgages are shaped and people are going to actually have to know what they're getting, what they're buying into. that's going to protect the economy, as well as the individual consumer. so this agency i think has the capacity to really provide middle class families the kind of protection that's been lacking for too long. now, the idea for this agency was elizabeth

warren's. she's a dear friend of mine, she's somebody i've known since i was in law school, and i have been in conversations with her, she is a tremendous advocate for this idea. it's only been a couple of months, and this is a big task, setting up this entire agency, so i'll have an announcement soon about how we're going to move forward, and you know, i think what's fair to say is that i have had conversations with elizabeth over the course of these last couple of months, but i'm not going to make an official announcement until it's ready. >> are you unofficially concerned about a senate confirmation? >> you know, i'm concerned about all senate confirmations these days. i mean, if i nominate somebody as dog catcher -- >> but with respect to elizabeth warren -- i wasn't trying to be funny! i am concerned about all senate nominations these days. i've got people who have

been waiting for six months to get confirmed who nobody has an official objection to and who were voted out of committee unanimously, and i can't get a vote on it. we've got judges who are pending, we've got people who are waiting to help us on critical issues like homeland security, and it's very hard when you've got a determined minority in the senate that insist on a 60- vote filibuster on every single person that we're trying to confirm. even if after we break the filibuster, it turns out to get 90 votes, they're just playing games. and as i think senator voinovich said very well, it's time to stop playing games. all right. chuck todd. >> in the theme i think of

all your answers, i've just got a short question for you. how have you changed washington? >> well, i'll tell you how we've changed washington. prior to us getting here, as i indicated before, you had a set of polices that were skewed towards special interests, skewed towards the most powerful, and ordinary families out there were being left behind. and since we've gotten here, whether it's making sure that folks who can't get health insurance because of preexisting conditions can now get health insurance or children who didn't have coverage now have coverage, whether it's making sure that credit card companies have to actually post in understandable ways what your credit card rates are and they can't jack up existing balances in arbitrary ways, whether it's making sure that we've got clean water and clean air for future generations,

whether it's making sure that tax cuts go to families that need it as opposed to folks who don't. on a whole range of issues over the last 18 months, we've put in place polices that are going to help grow a middle class and lay the foundation for long term economic growth. now, if you're asking why haven't i been able to create a greater spirit of cooperation in washington, you know, i think that's fair. i'm as frustrated as anybody by it. i think part of it has to do with the fact that when we came into office, we came in under very tough economic circumstances, and i think that some of the republican leaders made a decision, you

know, we're going to sit on the sidelines and let the democrats try to solve it. and so we got a lot of resistance very early. i think what's also true is that when you take on tough issues like health care or financial regulatory reform where special interests are deeply entrenched, there's a lot of money at stake for them, and where the issues are so complicated that it drags on for a long time, you end up having a lot of big fights here in town, and it's messy. and it's frustrating. and so there is no doubt that an option that was available to me when i came in was not to take on those issues. i mean, we could have decided you know what, even though we know that the pace

of accelerating health care costs is going to bankrupt this economy and bankrupt businesses and bankrupt individuals and even though we know that there are 30 million people and that's a growing number of people who don't have health insurance, we could have said you know what, that's just too controversial, let's not take it on, and we could have said with respect to financial regulatory reform, you know what, we're just going to get too much resistance from republicans, we shouldn't take that on. i don't think that's the kind of leadership that the american people would want from their president. and you know, are there things that i might have done during the course of 18 months that would at the margins have improved some of the tone in washington? probably.

is some of this just a core difference in approach in terps of how we move this country forward between democrats and republicans? i'd say the answer is a lot more the latter. ann quinlan. >> thank you mr. president. nine years after the sepember 11th attacks, why do you think it is that we are now seeing such an increase in suspicion and outright resentment of islam, especially given that it has been one of your priorities to improve relations with the muslim world? >> you know, i think that at a time when the country is anxious generally and going through a tough time, then, you know, fears can surface,

suspicions, divisions can surface in a society, and so i think that plays a role in it. one of the things that i most admired about president bush was after 9/11, him being crystal clear about the fact that we were not at war with islam. we were at war with terrorists and murderers who had perverted islam, had stolen its banner to carry out their outrageous acts. and i was so proud of the country rallying around that idea, that notion, that we are not going to be divided by religion, we're not going to be divided by ethnicity, we are all americans, we stand together against those who would try to do us harm. and that's what we've done over the last nine years,

and we should take great pride in that. and i think it is absolutely important now for the overwhelming majority of the american people to hang on to that thing that is best in us, a belief in religious tolerance, clarity about who our enemies are, our enemies are al-qaeda and their allies who are trying to kill us but have killed more muslims than just about anybody on earth. you know, we have to make sure that we don't start turning on each other. and i will do everything that i can as long as i'm president of the united states to remind the american people that we are one nation, under god, and we may call that god different names, but we remain one nation, and you

know, as somebody who relies heavily on my christian faith in my job, i understand that the passions that religious faiths can raise, but i'm also respectful that people of different faiths can practice their religion, even if they don't subscribe to the exact same notions that i do, and that they are still good people and they are my neighbors and they are my friends and they are fighting alongside us in our battles, and i want to make sure that this country retains that sense of purpose. and i think tomorrow is a wonderful day for us to remind ourselves of that.

natasha. is she here? there you are. back there. >> with the palestinian lead, they found it less ready for the historic compromise, president abbas says the palestinians won't recognize israel as a jewish state. the question is if these talks fail at an early stage will the administration disengage or will you step up and have personal involvement? >> president abbas and prime minister netanyahu were here last week and they came with a sense of purpose and seriousness and cord alt --

cordiality that frankly exceeded a lot of peoples' expectations. what they said was that they were serious about negotiating, they affirmed the goal of creating two states living side by side in peace and security, they have set up a schedule where they're going to meet every two weeks. we are actively participating in that that process. secretary of state hillary clinton will be flying to the middle east for the first series of next meetings on september 14th and 15th, so what we've done is to bring the parties together to try to get them to recognize that the path for israeli security and palestinian sovereignty can only be met through

negotiations, and these are going to be tough negotiations. there are enormous hurdles between now and our end point, and there are going to be a whole bunch of folks in the region who want to undermine these negotiations. we saw it when hamas carried out these horrific attacks against civilians and explicitly said we're going to try to do this to undermine peace talks. there are going to be rejectionists who suggest that it can't happen and there are also going to be cynics who just believe that the mistrust between the sides is too deep. we understood all that. we understood that it was a risk for us to promote these discussions. but it is a risk worth taking. because i firmly believe that it is in america's national security interest, as well as israel's national

security interests, as well as in the interests of palestinian people, to arrive at a peace deal. part of the reason that i think prime minister netanyahu was comfortable coming here was that he's seen during the course of 18 months that my administration is unequivocal in our defense of israel's security. and we've engaged in some unprecedented cooperation with israel to make sure that they can deal with any external threats. but i think he also came here understanding that to maintain israel as a jewish state that is also a democratic state, this issue has to be dealt with. i think president abbas came here despite great misgivings and pressure from the other side because he understood the window for creating a palestinian state is closing. and there are a whole bunch of parties in the region who purport to be friends of the palestinians and yet, do

everything they can to avoid the path that would actually lead to a palestinian state, would actually lead to their goal. and so the two parties need each other. that doesn't mean it's going to work. ultimately, it's going to be up to them. we can facilitate, we can encourage, we can tell them that we will stand behind them in their efforts and are willing to contribute as part of the broader international community in making this work, but ultimately, the parties have to make these decisions for themselves. and i remain hopeful, but this is going to be tough, and i don't want anybody out there thinking that it's going to be easy. the main point i want to make is it's a risk worth taking because the alternative is a status quo that is unsustainable. and so if these talks break down, we're going to keep on trying. over the long term, it has the opportunity, by the way, also, to change the

strategic landscape in the middle east in a way that would be very helpful. it would help us deal with an iran that has not been willing to give up its nuclear program. it would help us deal with terrorist organizations in the region. so this is something in our interest. we're not just doing this to feel good. we're doing it because it will help secure america as well. jake. >> thank you mr. president. a couple of questions: first, were you concerned at all when the administration had secretary of defense gates call this pastor in florida that you were elevating somebody who is clearly from the fringe? and then more substantively

on health care reform, it's been six months since health care passed, you pledged, a, that you would bend the cost kufrbgs and b, that democrats would be able to campaign on this, and cms reported yesterday that the cost curve is actually bending up from 6.1% to 6.3% , post health care legislation and the only democrats i've seen talking about health care legislation are running tv ads saying that they voted against it. thank you. >> >> with respect to the individual down in florida, let me just say -- let me repeat what i said a couple of days ago. the idea that we would burn the sacred texts of someone else's religion is contrary to what this country stands for. it's contrary to what this nation was founded on. and my hope is that this

individual praise on it and retpraeupbs -- prays on it and refrains from doing it. but i'm also commander in chief and we are seeing today riots in kabul, riots in afghanistan, that threaten our young men and women in uniform, and so we've got an obligation to send a very clear message that this kind of behavior or threat of action puts our young men and women in harm's way. and it's also the best imaginable recruiting tool for al-qaeda. and although this may be one individual in florida, part of my concern is to make sure that we don't start having a whole bunch of folks all across the country think this is the way to get attention. this is a way of endangering our troops, our sons and daughters.

fathers and mothers, husbands and wives who are sacrificing for us to keep us safe. and you don't play games with that. so you know, i hardly think we're the ones who elevated this story, but it is in the age of the internet something that can cause us profound damage around the world, and so we've got to take it seriously. with respect to health care, what i said during the debate is the same thing i'm saying now and it's the same thing i will say three or four years from now. bending the cost curve on health care is hard to do. we've got hundreds of thousands of providers and doctors and systems and

insurers, and what we did was we took every idea out there about how to reduce or at least slow the cost of health care over time. but i said at the time, it wasn't going to happen tomorrow. it wasn't going to happen next year. it took us decades to get into a position where our health care costs were going up six, seven, 10 percent a year. and so our goal is to slowly bring down those costs. now, we've done so also by making sure that 31 million people who aren't getting health insurance are going to start getting it. and we have now implemented the first phase of health care in a way that, by the way, has been complimented even by the opponents of

health care reform, it has been smooth, and right now, middle class families all across america are going to be able to say to themselves startsing this month, you know, if i've got a kid who is under 26 and doesn't have health insurance, that kid can stay on my health insurance. if i've got a child with a preexisting condition, an insurer can't deny me coverage. if i get sick and i've got health insurance, that insurance company can't arbitrarily drop my coverage there are 4 million small businesses around the country who are already eligible and in some cases will be receiving a 35 percent tax break on health care for their employees and i've already met small businesses around the country who say you know what, because of that is correct i'm going to be able to provide health care for my employees. i thought that was the right thing to do. >> the studny in february predicted a 1.6% increase

and now it's 1.3. it seems to have bent it up. >> as i said, jacob, i haven't read the entire study, maybe you have, but if you -- if the reports are true, what they're saying is that as a consequence of us getting 30 million additional people health care, at the margins, that's going to increase our cost, we knew that. we didn't think that we were going to cover 30 million people for free. but that the long term trend in terms of how much the average family is going to be paying for health insurance is going to be improved as a consequence of health care. and so our goal on health care is if we can get instead of health care costs going up 6 percent a year, it's going up at the level of inflation, maybe just slightly above inflation, we've made huge progress. and by the way, that is the

singlemost important thing we can do in terms of reducing our decifit. that's why we did it. that's why it's important. and that's why we're going to implement it effectively. >> and the house democrats running against health care, if you could comment on that. >> well, you know, we're in a political season where every candidate out there has their own district, their own makeup, their own plan, their own message. and you know, in an environment where we've still got 9.5% unemployment, you know, people are going to make the best argument they can and they're going to be taking polls for what their particular constituents are saying and try and align that often times. that's how political races work. >> april.

>> thank you mr. president. i want to ask a couple of questions. on the economy, could you discuss your effort at reviewing history as it relates to the poverty agenda of lbj and tkr-fpl king and also since senate republicans are holding up the issue of cobel, can you make any assurances before you leave office that you will make sure that those awards are funded? >> let me take the second question first, for those who aren't familiar, kobel and pickford relate to settlements surrounding historic discrimination against minority farmers who weren't often times provided the same benefits as everybody else under the usda this is a fair settlement, it is a just settlement, we think it is important for congress to

fund that settlement, we're going to continue to make it a priority. with respect to the history of fighting poverty, i got my start in public service as a community organizer, working in the shadow of steel plants that have been closed in some of the poorest neighborhoods on the south side of chicago. that's what led me to want to serve. and so i am constantly thinking about how do we create ladders for communities and individuals to climb into the middle class. now, i think the history of antipoverty efforts is that the most important antipoverty effort is growing the economy and making sure there are enough jobs out there. singlemost important thing we can do.

it's more important than any program we could set up, it's more important than any transfer payment that we could have. if we can grow the economy faster and create more jobs, then everybody is swept up into that virtuous cycle and if the economy is shrinking and things are going badly, then the folks who are most vulnerable are going to be those poorest communities. so what we want to focus on right now is broad-based job growth and broad-based economic expansion, and we're doing so against some tough head winds, because as i said, we are coming out of a very difficult time. we've started to turn the corner, but we're not there yet. and so that is going to be my central focus, how do i grow the economy, how do i make sure that there's more job growth. that doesn't mean that there

aren't some targeted things we can do to help the communities that are especially in need and probably the most important thing we can do on the economy generally is how can we improve school systems in low income communities. and i am very proud of the efforts that we've made on education reform, which have received praise from democrats and republicans. this is one area where actually we've seen some good bipartisan cooperation. and the idea is very simple. if we can make sure that we have the very best teachers in the classroom, if we can reward excellence instead of mediocrity and the status quo, if we can make sure that we're tracking progress in real serious ways, and

we're willing to make investments in what goes on in the classroom and not the school bureaucracy, and reward innovation, then schools can improve. there are models out there of schools in the toughest inner city neighborhoods that are now graduating kids, 90 percent of whom are going to college, and the key is how do we duplicate those, and so what our race to the top program has done, it's said that every state around the country, you know, instead of just getting money based on a formula, we want you to compete, show us how you are reforming your school systems to promote excellence based on proven ideas out there and if you do that, we're going to reward you with some extra money, and just the competition alone has actually spurred 46 states so far to initiate legislation designed to reform the school system. so we're very proud of that, and that i think is going to be one of the most important things we can do.

it's not just, by the way, k-12, it's also higher education. and as a consequence of a battle that we had, and it was a contentious battle, in congress, we've been able to take tens of billions of dollars that were going to banks and financial intermediaries in the student loan program and said we're going to give that money directly to students so that they get more help going to college. and obviously, poor kids are the ones who are going to benefit most from those programs. >> thank you mr. president, two questions. one on afghanistan. how can you lecture hamid karzai about corruption when so many of these corrupt people are on the u.s. payroll? and on the middle east, do

you believe that israeli prime minister benjamin netanyahu should extend the settlement moratorium as a gesture to peace, and if he doesn't, what are you prepared to do to stop the palestinians from walking? >> okay. on afghanistan, we are in the midst of a very difficult but very important project. i just want to remind people why we're there. the day before september 11th. we're there because that was the place where al-qaeda launched an attack that killed 3000 americans. and we want to make sure that we dismantle al-qaeda and that afghanistan is never again used as base for attacks against americans

and the american homeland. now, afghanistan is also the second poorest country in the world. >> it's got a ill literacy rate of 70%. it has a multiethnic population that mistrusts, oftentimes, each other. and it doesn't have a tradition of a strong central government. so what we have done is to say we are going to after seven years of drift, after seven years of policies in which, for example, we weren't even effectively training afghan security forces, what we've done is to say we're going to work with the afghan government to train afghan security forces so they can be responsible for their own security, we are going to promote a political settlement in the region that

can help to reduce the violence, we are going to encourage a afghan government that can deliver services for its people, and we're going to try to make sure that as part of helping president karzai stand up a broadly-accepted, legitimate government that corruption is reduced. and we've made progress on some of those fronts. i mean, when it comes to corruption, i'll just give you an example. four years ago 11 judges in the afghan legal system were indicted for corruption. this year 86 were indicted for corruption. we have seen afghan-led efforts that have gone after police

commanders, significant business people in afghanistan. but we're a long way from where we need to be on that. and every time i talk to president karzai i say that as important as it is for us to help you train your military and your police forces, the only way that you are going to have a stable government over the long term is if the afghan people feel that you're looking out for them. ask that means making sure -- and that means making sure that the tradition of corruption in the government is reduced. and we're going to keep on putting pressure on them on that front. is it going to happen overnight? probably not. are there going to be occasions where we look and see that some of our folks on the ground have made compromises with people who are known to have engaged in

corruption? you know, we're reviewing all that constantly, and there may be occasions where that happens. i think you're certainly right, helene, that we've got to make sure we're not sending a mixed message. so one of the things i've said to my national security team is let's be consistent in terms of how we operate across agencies. let's make sure that our efforts there are not seen as somehow giving a wink and a nod to corruption. if we are saying publicly that that's important, then our actions have to match up across the board. and, you know, but it is a challenging environment in which to do that. now, with respect to prime minister netanyahu and the middle east, a major bone of contention during the course of this month is going to be the potential lapse of the

settlement moratorium. the irony is that when prime minister netanyahu put the moratorium in place, the palestinians were very skeptical. they said, ah, it doesn't do anything. and it turns out to prime minister netanyahu's credit, the settlement moratorium has actually been significant. it has significantly reduced settlement construction in the region. and that's why now the palestinians say, you know what? even though we weren't that keen on it at first or we thought it was just window dressing, it turns out that this is important to us. what i've said to prime minister netanyahu is that given so far the talks are moving forward in a constructive way, it makes sense to extend that moratorium so long as the talks are moving in a constructive way. because ultimately, the way to

solve these problems is for the two sides to agree what's it going to be, israel? what's it going to be, the state of palestine? and if you can get that agreement, then you can start constructing anything that the people of israel see fit. in undisputed areas. now, i think the politics for prime minister netanyahu are very difficult. his coalition, i think there are a number of members of his coalition who have said we don't want to continue this, so, you know, one of the things aye said to -- i've said to president abbas is you've got to show the israeli public that you are serious and constructive in these talks so that the politics for prime minister netanyahu if he were to extend the settlement moratorium would be a little bit

easier. and, you know, one of the goals i think that i've set for myself and for my team is to make sure that president abbas and prime minister netanyahu start thinking about how can they help the other succeed. as opposed to how do they figure out a way for the other to fail. because if they're going to be successful this bringing about what they -- in bringing about what they now agree is the best course of action for their people, the only way they're going to succeed is if they are seeing the world through the other person's eyes. and that requires a personal relationship and building trust. hopefully, these meetings will help do that. okay. ann contin?

>> mr. president, what does it say about the status of american system of justice when so many of those who are thought to be plotters for september 11th or accused of suspected terrorism are still awaiting any kind of trial? the -- are you -- why are you still convinced that a civilian trial is correct for khalid sheikh mohammed, and why has that stalled, and will guantanamo remain open for another year? >> well, the -- you know, we have succeeded on delivering a lot of campaign promises that we made. the one where we've fallen short is closing guantanamo. i wanted to close it sooner, we have missed that deadline. it's not for lack of trying. it's because the politics of it are difficult.

now, i am absolutely convinced that the american justice system is strong enough that we should be able to convict people who murdered innocent americans, who carried out terrorist attacks against us. we should be able to lock them up and make sure that they don't see light of day. we can do that. we've done it before. we've got people who engage in terrorist attacks who are in our prisons, maximum-security prisons all across the country. but, you know, this is an issue that has generated a lot of political rhetoric, and people understandably, you know, are fearful. but one of the things that i

think is worth reflecting on after 9/11 is, you know, this country is so resilient, we are so tough, we can't be frightened by a handful of people who are trying to do us harm especially we've captured them, and we've got the goods on 'em. so i've also said that there are going to be circumstances where a military tribunal may be appropriate. and the reason for that is -- and i'll just give a specific example. there may be situations in which somebody was captured in theater , is now in guantanamo. it's very hard to piece together a chain of evidence that would meet some of the evidentiary standards that would be required in an article iii court. but we know that this person is

guilty, there's sufficient evidence to bring about a conviction, so what i have said is, you know, the military commission system that we set up -- where appropriate for certain individuals that would make it, it would be difficult to try in article iii courts for a range of reasons -- we can reform that system so that it meets the highest standards of due process and prosecute them there. and so i'm prepared to work with democrats and republicans, and we over the course of the last year have been in constant conversations with them about setting up a sensible system in which we are prosecuting, where appropriation, those in article iii courts, we are prosecuting others, where appropriate, through a military tribunal, and in either case let's put them in

prisons where our track record is they've never escaped. and, by the way, just from a purely fiscal point of view the costs of holding folks in guantanamo is massively higher than it is holding them in a super max maximum-security prison here in the united states. >> [inaudible] >> well, i think it needs to happen. and we're going to work with members of congress, and this is going to have to be on a bipartisan basis to move this forward this a way that is -- in a way that is consistent with our standards of due process, consistent with our constitution, consistent, also, with our image in the world of a country that cares about rule of law. you can't underestimate the

impact of that. you know, al-qaeda operatives still cite guantanamo as a justification for attacks against the united states. still, to this day. and, you know, there's no reason for us to give them that kind of talking point when, in fact, we can use the various mechanisms of our justice system to prosecute these folks and to make sure that they never attack us again. okay. ed henry. >> thank you very much. you were talking about some of the al-qaeda leaders that you have captured. one that you have not is osama bin laden. tomorrow's going to be nine years since he was the mastermind of 3,000 americans being killed, and what you said, obviously, the last administration had seven years and couldn't do it. but what you said as

president-elect to cbs is, quote, i think capturing bin laden, he's not just a symbol, he's also the operational leader of an organization planning attacks against the u.s. do you still believe it's a critical part of your policy to capture or kill him, and do you think isn't it a failure of your add hrgs that here it's almost two years in, you campaigned saying you were going to run a smarter war on terror than the bush administration, you haven't captured him, and you don't seem to know where he is. >> well -- [laughter] ed, i think capturing or killing bin laden and zawahiri would be extremely important to our national security. doesn't solve all our problems, but it remains a high priority of this administration. one of the things that we've been very successful at over the last two years is to ramp up the pressure on al-qaeda. and their key leaders. and as a consequence, they have been holed up in ways that have

made it harder for them to operate. and part of what's happened is bin laden has gone deep underground. even zawahiri who is more often out there has been much more cautious. but we have the best minds, the best intelligence officers, the best special forces who are thinking about this day and night. and they will continue to think about it day and night as long as i'm president. >> so do you think americans are going to face another nine years of this terror threat, another generation? what's your message? >> well, here's what i think. i think that in this day and age there are going to be -- there is always going to be the potential for an individual or a small group of individuals if be they are willing to die, to kill

other people. some of them are going to be very well organized, and some of them are going to be random. that threat is there, and it's important, i think, for the american people to understand that and not to live this fear, it's just a reality of today's world that there are going to be threats out there. we have, i think, greatly improved our homeland security since 9/11 occurred. you know, i am constantly impressed with the dedication that our teams apply to this problem. they are chasing down every thread not just from al-qaeda, but any other actor out there that might be engaging in terrorism. they are making sure that even

a, what might appear to be a lone individual who has very little organizational capacity, if they make a threat, they follow up. but one of the things that i want to make sure we do as long as i'm president and beyond my presidency is to understand america's strength, in part, comes from its resilience. and that we don't start losing who we are or overreacting if, in fact, there is, there is the threat of terrorism out there. we go about our business, we are tougher than them, our families and our businesses and our churches and mosques and synagogues and our constitution and our values, that's what gives us strength, and we are going to have this problem out

there for a long time to come, but it doesn't have to completely distort us, and it doesn't have to dominate our foreign policy. what we can do is to constantly fight against it. and i think ultimately we are going to be able to stamp it out, but it's going to take some time. >> last question. >> wendell. >> thank you, mr. president. i wonder if i can get you to weigh in the on the wisdom of building a mosque a couple of blocks from ground zero. we know that the organizers have the constitutional right. what would it say about this country if they were somehow talked out of doing that, and hasn't the florida minister's threat to burn a couple hundred copies of the koran, hasn't the threat itself put american lives in danger, sir? >> well, on the second, on your second question there's no doubt

that when someone goes out of their way to be provocative in be ways that we know can enflame the passions of over a billion muslims around the world at a time when we've got our troops in a lot of muslim countries, that's a problem. and it has made life a lot more difficult for our men and women in uniform who already have a very difficult job. with respect to the mosque in new york, you know, i think i've been pretty clear on my position here, and that is that this country stands for the proposition that all men and women are created equal, that they have certain inalienable rights. one of those inalienable rights is to practice their religion freely. and what that means is that if

you could build a church on a site, you could build a synagogue on a site, if the be you could build a hindu temple on a site, then you should be able to build a mosque on a site. now, i recognize the extraordinary sensitivities around 9/11. you know, i've met with families of 9/11 victims in the past. you know, i can only imagine the continuing pain and anguish and sense of loss that they may go through. and tomorrow we as americans are going to be joining them in prayer and remembrance. but i go back to what i said earlier, we are not at war against islam. we are at war against terrorist

organizations that have distorted islam or falsely used the banner of islam to engage in their destructive acts. and we've got to be clear about that. we've got to be clear about that because if be we're going to -- if we're going to deal with the problems that ed henry was talking about, if be we're going to successfully reduce the terror threat, then we need all the allies we can get. the folks who are most interested in a war between the united states or the west and islam are al-qaeda. that's what they've been banking on. and fortunately, the overwhelming majority of muslims around the world are peace-loving, are interested in the same things that you and i are interested in. how do i make sure i can get a good job, how can i make sure my

kids can get a decent education, how can i make sure i'm safe, how can i improve my lot in life. and so they have rejected this violent ideology for the most part. overwhelmingly. and so from a national security interest we want to be clear about who the enemy is here. it's a handful of tiny minority of people who are engaging in horrific acts. and have killed muslims more than anybody else. the other reason it's important for us to remember that is because we've got millions of muslim-americans, our fellow citizens, in this country. they're going to school with our kids. they're our neighbors. they're our friends. they're our co-workers. and, you know, when we start

acting as if their religion is somehow offensive, what are we saying to them? i've got muslims who are fighting in afghanistan. in the uniform of the united states armed services. they're out there putting their lives on the line for us, and we've got to make sure that we are crystal clear for our sakes and their sakes, they are americans. and we honor their service. and part of honoring their service is making sure that they understand that we don't can differentiate -- we don't differentiate between them and us. it's just us. and that is a principle that i think is going to be very important for us to sustain and, i think, tomorrow it's an

excellent time for us to reflect on that. thank you very much, everybody. jenna: that's president obama finishing up his first news conference since may. the president speaking for just under an hour and 20 minutes and really covering a wide range of topics. we're going to be discussing some of those with wendall goler and bret baier in a moment. it's very important to point out that this is on the eve of the anniversary of the attacks on september 11th. the president spoke about that quite extensively a little bit in his comments to wendell just there. this is also, though, the weekend before congress comes back into session. the full sessions really start on tuesday, and the president really taking this time to address some of those small business initiatives, that big bill, $30 billion bill that he's trying to get through the senate there along with some of his other initiatives for the economy. a few other topics that were covered, not only the economy, as we mentioned, 9/11, and as well as the mideast peace talks that the president said really

is a risk worth taking right now despite everything that's going on in the world. also health care being issue, about health care costs going up and why that's happening. and also a candid moment by the president when he was asked, is he actually changing the tone in washington between democrats and republicans, and the president really taking responsibility there and saying, no. in fact, he hasn't been able to influence as much change as he would like. jon: let's bring in the anchor of "special report," bret baier, for some analysis of what the president had to say. no president goes out for one of these formal news conferences, conferences,bret, without an ulterior motive. >> reporter: well, i think he wanted to focus on the economy, he spent a lot of time in his opening statement talking about that and spent a lot of time talking about how democrats' ideas are different than republicans. his opening statement was i'd like to take some time to talk about some things we're doing to

dig ourselves out of the recession. now, that's a key point because he went on to talk about how he wants to let the top tier bush-era tax cuts expire. and the reason he wallets to do that. -- wants to do that. republicans are pointing back to just one year ago when the president said this: the last thing you want to do is to raise taxes in the middle of a recession because it would just suck up or take more demand out of the economy and put business in a further hole. so it's interesting that he spent time talking about why he wants to let those top-tier bush tax cuts expire but also started out with a talk about how he's going to dig himself, dig the country out of the recession. also he got as close as any democrat has so far to saying that this was, in fact, a second stimulus package that he's proposing, the $50 billion in infrastructure projects that he's proposing. didn't use the word stimulus but smiled and essentially said, yes, i want to stimulate and

grow the economy. the problem on the argument of the tax cuts and letting the top tier expire, while he says 97% of the families in america are under the $250,000 number, 3% include about 50% of the small business income according to independent analysis. so you have a lot of folks, potentially, in the top tier that he wants to let go. jon: going to be a lot more about it on "special report" this evening, i'm sure. bret baier, thank you. jenna: the president answered 13 questions, one asked by our very own wendall goler who has his take on the president's conference. >> reporter: well, the president's goal was to convince people that the economy, the trajectory of the economy is in a positive direction. but that he is not satisfied with it. his aides aren't satisfied with it, and they're continuing to do what they can to stimulate job growth, create job growth or as bret baier just said, stimulate

job growth, and that was a bit of news the president made. yesterday's announcement that weekly unemployment filings declined more than expected was positive, it gave folks here some reassurance that we're probably not facing a double-dip recession, but the president continuing to push job growth and also since this was most likely his last news conference before the fall elections, he got in some political points accusing republicans of opposing business tax cuts that he said, he suggested they might support in a nonpolitical time and opposing them purely for political reasons. so the president trying to talk up the economy as well as convince people that he remains concerned about it in many what is likely to be his last news conference before voters go to the polls. and he has said that if this, the fall elections are a referendum on the economy alone,

it's going to be a tough one for democrats. guys? jenna: wendall, thank you so much. wendall goaler in the east room for us. we also want to mention wendell wuss talking about some of the comment -- was talking about some of the comments the president made about the republican party. we're going to be speaking to the chair of the republican national party, michael steele, coming up next. jon: six people confirmed dead after that gas main explodes setting a neighborhood near san francisco on fire. jenna: hi, everybody, thank you for staying with us here on "happening now," i'm jenna lee. jon: i'm jon scott. a neighborhood near san francisco up in flames, fire crews are flooding the ruins of smoldering homes with water. the explosion was heard for miles shooting a huge fireball, i should say, hundreds, maybe a thousand feet in the air, punching a giant hole in the ground as well. hundreds of residents rushing for safety. at least four people have been

killed, indications it may be as many as six. dozens more injured, some with critical burns. 38 homes in a residential neighborhood near san francisco. adam houseley is reporting live in san bruno, california. what is the latest you have, adam? >> reporter: yeah, jon, those numbers continue to fluctuate. a hint of good news, one authority came out and said maybe only 38 homes destroyed, but again, fire agencies are giving us conflicting numbers, and you might imagine that is because the situation down there is still one that is very uncertain. in fact, a fire spotter plane has been diving down through the canyon here taking thermal images of this fire area to see where they can bring the cadaver dogs into, where it's safe for firefighters to go into. they do know they still cannot get to the source of the explosion. the gas has been turned off, but they can't get to the source because it's still just too hot to get there. meantime, the pictures from last night and into this morning are nothing other than dramatic. it was unbelievable here at this

scene. neighbors blocks away felt the explosion, people say it sounded like a jet engine over the top of them, flames literally leaping not only from the gas fire, but you have two separate fires here. you've got the gas fire, but also the fires that were in these homes. so firefighters have a very difficult situation. i just met a neighbor named dennis, give me your last name. >> castan, nzo. >> you live in a neighborhood overlooking this place? >> 75-100 yards from where the gas main exploded. >> reporter: as we show some of the video from last height and the pictures of these flames in some cases shooting 250 feet in the air, tell me what it was like. people were literally running down the street. >> you know what? we thought it was an earthquake at first, so i ran outside. i was in my garage, and the next thing you know, i mean, the intense heat hits you. it was so hot, i've never felt anything like it in my life. you couldn't stand there. everybody was just running out of their houses and running up the block. >> your neighbor was burned?

is. >> she burned her arms, and that was from the heat from the fire. she never had contact with the fire itself, it was that bad. you couldn't stand there and look at it from 100 yards away. it was just the loudest rumbling you've ever heard. houses were shaking. we still thought it was an earthquake, and then someone said there was an airplane that had crashed, but it turns out it was a gas main. >> reporter: dennis, i know you're worried about your neighbors, and he's been talking about that as well. guys, that's the first thing they say, about their neighbors, how are they doing? dennis did confirm one thing, i just got shown some pictures that one of the fire crews took a couple of feet away from normally where a mailbox would sit. we've covered a lot of fires here, the home wasn't just burned down, it was incinerated. i've never seen a fire burn that hot. dennis said they'd go up in a matter of seconds, guys. jon: unbelievable. an absolute inferno. adam houseley, thank you for that report. just want to let our viewers know you can check out our slide

show for a lot more dramatic images of this deadly san francisco suburb explosion available to you right there on foxnews.com. now, if you are in that area and you're able to safely take any pictures like this one center to us by a fox viewer of the catastrophic scene, you can log on to foxnews.com, click on the you report link there to send us what you are seeing. we might put your video and shots on the air, but above all things be sure to stay safe and don't get in anybody's way. jenna: we'll stay on that story for you. coming up after the break, though, rnc chairman michael steele with republican reaction to the president's comments. plus, we're going to talk to the pastor of a church in san bruno who saw and felt that explosion. two people from his church lost their homes and at least one had burn injuries. we're going to be right back with more on that. let me tell you about a very important phone call i made.

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and find out about an aarp medicare supplement insurance plan. you'll get this free information kit... and guide to understanding medicare, to help you choose the plan that's right for you. as with all medicare supplement plans, you can keep your own doctor and hospital that accepts medicare, get help paying for what medicare doesn't... and save up to thousands of dollars. call this toll-free number now. jon: a fox news alert and at least six people are confirmed dead after a gas main explodes setting a neighborhood near san francisco on fire. right now fire crews are flooding the ruins of smoldering homes with water. the explosion last night was heard and felt for miles shooting a huge fireball hundreds of feet in the air punching a giant home -- hole in the ground. flames tore through the entire neighborhood skipping from house to house. hundreds of residents had to rush for safety. pastor lee bishop is head of the nearby church of highlands and joins us now. it's my understanding you were

actually in the parking lot of your church when this thing went up, and you were looking right at it, huh? >> that is correct, sir. i was talking with our traffic directer because we had a meeting that night scheduled, and we were both looking in that direction when the explosion occurred. jon: what did you think, what did you feel? >> well, we felt the heat, and it was a huge explosion. because of the angle we were at, it looked like it was right behind our church. so my first instinct wuss to run into the -- was to run into the church and set off the fire alarm to get everybody out of the building. and then after we came out of the building, we walked to the fence, and we could see where the explosion had taken place. jon: how far away from you was it? >> it was about three-quarters of a mile away. we knew we were safe because the wind was blowing in the opposite direction, and so we just continued to watch what was happening there and use our church as a place where people could come if they needed for help, which it's still available. we're the second place that is

an emergency location for people in need. jon: i'm sure you've seen some of the pictures. you had a fire so big that the homes immediately around it were instantly incinerated, but then i guess you had some wind that was just spreading the fire from house to house almost like a forest fire. >> yeah. as we watched, it seemed to just be moving so quickly. and the firemen couldn't do anything about it at the point because they had no water available to them, and they had to, basically, come up to by where our church is to fill their trucks up and then come down here and empty them out again on the fire, so it was a back and forth -- jon: they had no water available because, apparently, when that pipe blew up, it took out a water main as well, huh? >> yes, that's true. jon: there are reports that some people say they smelled natural gas in, you know, the sewer pipes coming out of the storm sewer grates and so forth in that neighborhood for a month or two before this thing actually exploded. is that a report that you have heard?

>> no. we have families that live down in that area, and i have not heard them refer to that, but there were several people who did say they did smell that smell on the news. that's the only way i knew about it myself too. jon: so what are you doing for the people in that neighborhood who are affected. you must have seen some terrible things, some people who have been badly hurt here. >> well, again, we're far away, and we have learned by working with the police not to go down into an area where they're working because it's, people interfere with what they do. so we, basically, over the news media and stuff told people to come to our church if the they were in need of help. and, of course, we had people there around the clock even last night if anybody needed help from our church that we were there for them. we're also available today for people who maybe need to come for sharing and counseling and prayer. because we know how important that is at a time like this. jon: yeah. just the shock of an incident like this. we're looking at the crater that was left after, apparently, this gas line exploded.

there is no official ruling on the cause yet, but that's believed to be what happened, a gas line exploded and set an entire neighborhood on fire. at least 38 homes destroyed. pastor lee bishop, we wish you well as you struggle to help that neighborhood rebuild. thank you. >> thank you very much. thank you. jon: and for our viewers, go to foxnews.com to find out what you should and shouldn't do if you think you have a gas leak in your area. it's right there for you on foxnews.com. jenna: well, president obama defending his party's economic policies. the president holding a news conference just a short while ago, and mr. obama saying he understands voters' frustrations over the slow recovery but insists that the economy is showing some signs of improving. he also took the opportunity to call out republicans with this remark. >> the policies that the republicans are offering right now are the exact policies that got us into this mess.

jenna: michael steele is chairman of the republican national committee and joins us now. so, mr. steele, what are the republicans' new ideas this campaign season? >> well, it's, first off, it's good to be with you, jenna. i think the new ideas have been floating around for a number of months now, if not the past 18 months talking about getting the cash into the economy that the citizens need so that they can begin to consume the products that are produced by small businesses across the country. we have looked at capital formation, credit formation, we've looked at stimulating the economy, if you will, to use a term the president won't to describe what really needs to be done. in terms of looking at cutting back on taxes to small businesses, cutting back on the regulatory burdens that they have so you can free up and give them a sense that they have control of creating an opportunity in the economy. what we have here right now is more of the same. you have the president proposing

a small business bill which is nothing more than t.a.r.p. 3 or mini t.a.r.p. in which, basically, you're going to put money into football institutions -- financial institutions on the assumption that small businesses are going to take out credit lines. they don't need that. what they need is consumers to go out into the marketplace to buy the goods and services that they provide so they can begin to hire and expand services. this is not rocket science, but apparently we need a rocket scientist in the administration to understand exactly how the economy works. jenna: it seemed that the president was talking about stimulus yet again, but the republicans are talking about cutting spending and also cutting taxes which is something that republicans have talked about, really, for the last several years. so what do you think would change? if the republicans take control of the congress, what would change? >> i think one of the first things you would see would be legislation that would address both of those issues. cutting the burdens of, due to taxes that are pushing down the ability of small businesses to

grow, cutting down the spending of this administration and putting in check the costs that the government is passing on not just to this generation, but to future generations in the debts and the deficits. you're talking, you know, $13 trillion worth of debt out there that the american people are going to have to account for at some point. and so you've got to begin to peel back on the spending, let the bush tax cuts stay in place even as the republicans said if be you're going to talk about the wealthiest americans, at least compromise and give us an extension, if you will, so that in the middle of the recession those who do have a direct hand in creating jobs have more incentive to go out ask and do that. jenna: and let's talk about the midterms now. here's what you had to say at the beginning of the year on the republicans' chances of taking back congress. take a listen to this. >> do you think you can take over the house? >> not this year. >> you don't think so? >> well, i don't know yet because i don't know who all the candidates -- we still have some vacancies that need to get

filled. but the question we need to ask ourselves, if we do that, are we ready? jenna: mr. steele, are republicans ready? >> i believe that we are. i think you've seen over the past year especially but certainly in the last six or seven months a coalescing of ideas around how we can move the economy forward, programs and policies that have been introduced by individuals like paul ryan that talk about how we can really move this economy forward, efforts that address the relationships that we have with our foreign partners and our enemies. jen mr., steele, so are you actually taking back the congress, are you going to guarantee that? >> i can't -- well, i can't guarantee anything. only the american people can do that with their vote. all i can tell you is we have done everything and put in place every step necessary to help our candidates and our incumbents run on positive agenda with the sense of this is where we want to take the country. we saw the beginnings of that in new jersey, virginia, massachusetts and hawaii.

we're going to see it a furtherance of that this november, and i think we're well poised to do more than just win, but take control of the united states congress and move this country in a direction of fiscal responsibility, not continue with continued government spending and redistribution of wealth. jenna: sure. mr. steele, you're in a very high-profile position, and i'm sure it's no secret to you that when you're in a high-profile position, you have some criticsment some of your critics are saying you're more concentrating on your re-election as chairman of the rnc. [laughter] than concentrating on the re-election of republican candidates. what are your political ambitions? >> oh, that's so funny, you know? you know, of all my critic -- if all my critics spent more time worrying about how they're going to help republicans win in november, i think we'd be well down the road to securing and guaranteeing -- your word -- you know, control of the house and the senate this coming november. the reality of it is we are

launching a 48-state, six-week bus tour this coming week in which we're going to the grassroots to stimulate, again, our base, to turn them out, to emphasize the importance of republican ideas at a time when the american people are not just angry, but very fearful of the direction this country's going. we've got some good candidates who are running. we've put a significant amount of investment, over $20 million in this cycle, into the state parties alone to help them prepare for elections in november not to mention the over 300 victory offices we have currently open around the country fully staffed and operating. so this is less about one individual, this is less about who the next speaker of the house is going to be and more about taking the ideas of our party and moving them into the future, moving this country into the future and putting, i think, a firm check on the spending habits, the fiscal irresponsibility of this administration.

and at the end of the day i have one job requirement right now that's been given to me by the republican party and, i think, the american people, and that's to fire nancy pelosi. jenna: so are you saying you're not going to run for chairman of the rnc in january? >> i'm not saying -- i'm not saying -- jenna, i'm not saying anything on that until the time is right. let's get to november 2nd and win elections, and then all the players in town can figure out where they want to be on the chess board after we do what the people have asked us to do, focus on their concerns, their priorities, listen to them for once which hasn't happened over the last 18 months, and move the country in a different direction. we'll let the political leadership whether it's policy leadership fall out as it may. jenna: mr. steele, we know it's a busy time for you. we really appreciate you joining us today. thank you, sir. >> you got it. jon: just moments ago president obama admitted his attempts to improve the economy are, quote, not there yet. well, who's going to join us

next? steve forbes has his take on how the economy is doing and if the president is helping or hurting. this is it, the final days of our summer sales event

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call... before this limited-time offer ends. megyn: hi, everybody, i'm megyn kelly. president obama denying he waits too long to focus on the economy saying his latest proposals are not just an effort to shore up votes before the midterms. neil abort has thoughts on that. plus, keeping up with naughty foe eaus of kim kardashian. why the reality show starlet is fighting mad about some x-rated photos of her just surfacing. and if you watch only one thing today, join us at 2:30 for a special power panel. a first responder for 9/11, a man who fought for the united states in afghanistan, a man inside the white house as the terror broke that day, and our own rick leventhal who reported life on 9/11 -- live on 9/11 covered in ash all share their thoughts on where we are now. see you top of the hour. jenna: well, president obama earlier insisting the u.s.

economy is showing some signs of improvement, and with the midterm elections coming up, the president really cast democrats as warriors for the hard-pressed middle class and republicans as protectors of millionaires and also special interests. steve forbes is editor in chief of "forbes" magazine. we know the president ran a little long, thanks for hanging with us. [laughter] >> well, if the president could do for the economy what he does for speaking, we'd be in a boom right now. but in terms of the economy itself, it really was more of the same old same old. he's come up with some interesting proposals such as extending the r&d credit, making that permanent, one-year time for writing off capital expenditures, but he's not doing what needs to be done which is stop the binge spending, stop the tax increases and let's suspend obamacare for, say, 100 years. he does those things, and you'd really start to see the economy move ahead. jenna: that's quite a list. one of the things that the president announced today is

he's making austan goosbee the head of the council of economic advisers. he calls him one of the finest economists in this country. what do you think about that appointment? is it good for us or not? >> well, it's good in the sense that goolsby, i think, believes in free trade which the president and people around him hadn't been, so in that sense it's good. but the president makes the policy. and until the policy fundamentally changes, having a different crew on the deck of the titanic's not going to make much difference. the captain's still determined to smash into the iceberg. yes, the economy's growing, jenna, but it should be growing at a much faster pace and would have been if we hadn't had this binge spending, tax increases and semi-takeover of health care, the financial industry and the attempted takeover of the energy industry. jenna: tell us a little more about that. you used the titanic as a metaphor. is our economy going into a second sinking, if you will, are we headed to a double-dip

recession? >> no, we're not going to go -- thankfully, the economy is strong enough in fundamentals, so we're not going to have a double-dip recession. we're just not going to get the kind of growth we need. it's kind of like walking pneumonia. not enough to put you in bed, but you don't feel very good. it's not the pace we should be doing. it's not going to get us in the world series winning half of our games. jenna: is there anything that the president mentioned today with the small business initiatives or the extra infrastructure spending that you think is a good idea? >> well, again, extending the r&d tax credit in the his overall package is a good thing, but on the one hand he giveth like this one-year moratorium on taxes and capital spending, but then he raises in other forms of business. he still believes business people are greedy polluters, so he's going to be reluctant to truly do what needs to be done to get this economy performing to its full potential.

jenna: thank you so much for joining us today, mr. forbes. >> thank you. jon: a fox news alert, breaking news after that terrible explosion near san francisco. more than 38 homes burned, six people are dead. an update coming up. [ woman ] alright, so this tylenol 8 hour lasts 8 hours. but aleve can last 12 hours. and aleve was proven to work better on pain than tylenol 8 hour. so why am i still thinking about this? how are you? good, how are you? [ male announcer ] aleve. proven better on pain.

jon: forty years ago president nixon declared the war on cancer, but today that disease still kills one in five americans each year. for cancer victims, it takes a lot of faith, support and perseverance to keep fighting. >> cancer is scary, it is challenging, it is threatening. >> you used to have a big lesion right here on the side -- >> it absolutely changes a person's life when they receive that diagnosis. >> my leg was swelling up so bad

because of the tumors. i wasn't able to barely walk. i mean, it was so painful. >> having to tell my children was very, very difficult. it's your worst nightmare. jon: that's a clip from our fox news channel special, "winning the war on cancer." it's a one-hour special that takes a look at what progress has been made on cancer treatments and if, in fact, this is a war the medical community is winning. joining us now, dr. manny alvarez, senior managing editor of fox news health.com and, of course, a member of our medical a-team. are we winning? >> i think we are. one of the exciting things about the special ha's going to air at 3 and 9 p.m. sunday is it's going to show you exactly all the advances in cancer care that we have had. and let me tell you, some of them are miraculously creating new ways that people can live with cancer. and i think a lot of scientists are saying that they're looking at cancer differently nowadays almost like a chronic disease.

so we're going to show i yo some of the cures -- show you some of the cures. we start with a segment on melanoma, and now doctors, of course, have found new ways that your own body is able to kill those cancer cells. so a very exciting special. not all the answers are there, this is just a one-hour special, but nonetheless, it has a lot of good information. jon: we are looking forward to seeing it. i think our viewers and just about all of us know somebody or loved somebody whom we lost to cancer. it's going to be great to see. dr. manny alvarez, thank you. don't miss fox news reporting, "winning the war on cancer." it's a one-hour special that airs sunday, september 12th, 3 p.m. and 9 p.m. eastern time. and want to say thanks to you for joining us. jenna: it's certainly been a busy day, hasn't it? you'd think you could ease on into the weekend, and then it doesn't happen. jon: have a great weekend, everybody. jenna: "america live" is up next.

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